By Lauren Ashley Week*
A shortage of roughly two million homes burdens California’s housing market. Research has estimated that to keep up with growing demand, the state needs to build at least three and a half million new units by 2025. As a promise campaigned on in 2018 by now Governor Gavin Newsom, this lofty goal would require construction of 500,000 units per year. Unfortunately, warnings predicting the unfeasibility of such production have held true: California cities approved about 90,000 permits in 2019, leaving a 410,000 gap between political targets and reality. Despite this disappointment, Newsom’s promise combined with constituents’ increasing concerns over unaffordability have reinvigorated lawmakers’ efforts to solve the housing crisis. State and local politicians alike have pushed for a plethora of innovative and progressive housing laws: in 2019 alone, the California State Assembly and Senate combined passed 12 housing-related bills (although legislators introduced many more that ultimately failed). Four of these acts reformed regulation surrounding accessory dwelling units—small in size, but potentially a big impact solution to California’s housing crisis.
Section 65852.2(j)(1) of the California Government Code defines accessory dwelling units, often referred to in shorthand by ‘ADUs,’ as “an attached or a detached residential dwelling unit which provides complete independent living facilities,” including “permanent provisions for living, sleeping, eating, cooking, and sanitation,” located “on the same parcel as the [primary] single-family or multifamily dwelling.” Popular examples include granny flats or an apartment located over a garage or in a home’s basement. Proponents of ADUs champion them as a solution due to their flexibility, affordability (both in terms of construction and potential rents), and minor environmental impact.
Due to these benefits, initial reforms were met with much fanfare. Passed in 2016, the reforms altered various parking and design requirements embedded within zoning laws as well as fee schedules that previously restricted ADU development.Researchers touted Senate Bill 1069, and complimentary Assembly Bill 2299, as “key policy facilitating new ADU development across the state.” For example, the University of California, Berkeley’s Terner Center for Housing Innovation found that as a result of 2016 ADU legislation more than twelve times as many San Francisco property owners submitted ADU permit applications in 2017 as compared to 2015. Although California’s overall housing production still lagged behind Newsom’s campaign promise, ADUs provided a small glimmer of hope. Moreover, beyond the realized objective of increased housing production, proponents clung to the theoretical benefit of increased affordability. From Newsom’s campaign promise to economic research to government handbooks, officials and academics alike promoted the idea that expanding the supply of housing via ADUs correlated to more affordable housing overall for California’s most vulnerable communities.
Motivated by this philosophy, and more importantly, required by state law, municipalities across California adapted their own local ADU ordinances to conform to state standards. However, some cities went “beyond what has been mandated by the state” to pursue even more progressive ADU policy, especially the City and County of San Francisco. Even prior to the passage of Senate Bill 1069, San Francisco allowed for ADUs in the Castro neighborhood as early as 2014. In 2015, the City dangled ADUs as an incentive for property owners required to seismically retrofit their buildings due to earthquake risk. And in 2016, with the passage of Ordinance No. 162-16, the City legalized ADUs in all neighborhoods citywide, as well as allowed their addition on existing multifamily properties such as apartment complexes and duplexes. After the adoption of Senate Bill 1069, the San Francisco Board of Supervisors passed Ordinance No. 95-17 in early 2017 to ensure the City’s ADU review and approval process met all requirements of the state’s 2016 mandates. A few months later the Board, aiming to provide further flexibility, once again modified their ADU program with the adoption of Ordinance No. 162-17.
Although San Francisco Mayor London Breed issued an Executive Directive on August 31, 2018 to further expedite ADU permits, the above mentioned Ordinances—162-16, 95-17, and 162-17—encompass all of San Francisco’s most recent legislative attempts at streamlining and expanding application and review processes for ADUs within the City.  However, despite continued emphasis on ADUs as a solution (at the state-level California passed yet another ADU-focused law in 2020 that came into effect in the new year), skepticism surrounding their ability to provide affordable and below-market rate housing has proliferated. Urban planning research out of the University of Massachusetts Amherst has argued that “the confluence of a lack of oversight and the unproven efficacy of ADUs as low-income housing means that California has low-income housing units that exist on paper, but not in operation.” Essentially, municipalities across California count each new ADU as an additional below-market housing unit; however, no zoning codes or other enforcement mechanisms exist to ensure ADUs qualify as and remain affordable. Analyzing a sample of 759 constructed ADUs across the state, the same study found that none of these units were actually identified as available low-income housing. Ultimately, ADU legislation successfully increased localities’ overall housing inventory, but failed to offer low-income housing options.
Considering San Francisco’s dynamic ADU efforts, overall progressive ethos, and the acute nature of the Bay Area’s housing crisis, I sought to understand if such statewide findings applied to the City and County of San Francisco. (Although the statewide study analyzed cities located within the larger San Francisco Bay Area, it did not assess ADUs within the boundaries of the City itself.) The San Francisco Planning Department has witnessed and testified to the exponentially increasing number of ADU permit applications; as of 2019 planners have approved over 900 since the adoption of the City’s first ADU law in 2014.  But, do these units provide the City’s lower-income community members with much needed affordable housing?
To answer this question, I used the San Francisco Department of Building Inspection’s (‘DBI’) online permit tracking system, and searched for any and all permits referencing keywords such as ‘accessory dwelling unit,’ ‘ADU,’ and the names of the related ordinances that were filed between August 1, 2016 and December 31, 2020. Although the City had ADU programs prior to 2016, such processes were limited by neighborhood or seismic retrofitting requirements. Thus, I only analyzed permits filed after August 1, 2016—the first of the month after Ordinance 162-16 went into effect and ADUs were allowed citywide. To further narrow my sample frame, I removed all permits filed after August 1, 2016, but approved under the original Castro neighborhood or retrofit incentive programs. Additionally, if an application did not contain enough information for me to assess what ordinance (162-16, 95-17, or 162-17) the DBI issued a permit under, I removed it from the frame. This resulted in a sample of 263 total permits spread across San Francisco—from the southeastern corner of Bayview to the hilly northeastern neighborhoods of Nob Hill and North Beach to the coastal communities on the City’s western edge: Outer Richmond, Outer Sunset, and Lakeshore.
The sample also featured proposed ADUs from each of San Francisco’s eleven Supervisor Districts, which define the political boundaries represented by each member of the City’s local council, the Board of Supervisors. In addition to the permit data, I also collated two socioeconomic features for each Supervisor District: 1) median household income (in dollars); and 2) percentage of the District’s population living under the poverty line. Although I could not access specific rental prices for each of the ADU units in the sample frame (because of a lack of reliable databases, but more importantly, because many of the proposed units are currently under construction and do not yet physically exist), I sought to answer my research question by determining if assumed-to-be-affordable ADUs were being built in the lowest income communities. A simple side-by-side comparison of the data, i.e., the permit information contrasted against each District’s socioeconomic characteristics, revealed an unfortunate truth: even if ADUs do provide below-market rate housing, they barely support San Francisco’s most price-vulnerable communities.
Table 1. Income and Poverty Characteristics compared to ADU Permits Issued across San Francisco’s Supervisor Districts.
|Supervisor District||Median Household Income ($)||Population in Poverty (%)||ADU Permits Filed|
As illustrated by the above table, Districts Three and Six constitute the two lowest income Supervisor Districts, as measured by median household income. Additionally, their populations both suffer from the highest rates of poverty. District Three encompasses the neighborhoods clumped together in San Francisco’s northeastern edge: North Beach, Chinatown, Fisherman’s Wharf, Polk Gulch, Union Square/Financial District (a non-residential area), and Russian, Nob, and Telegraph Hills.Despite the District’s outward appearance as bustling and prosperous, due to its popularity among tourists and inclusion of San Francisco’s core business center, it features the second lowest median household income—at $59,111—and second highest poverty rate—at 17%—among the City’s political divisions. This may be explained by the District’s large immigrant population, as over 42% of the community’s inhabitants identify as foreign-born (compared to 35% of the City overall).
District Six, home to Treasure Island, Mission Bay, South Beach, Rincon Hill, Yerba Buena, South of Market (or ‘SOMA’), Mid-Market, Civic Center, and the Tenderloin, is San Francisco’s lowest income community with a median household income of $54,819. It also has the highest percentage of its population living under the poverty line at 23%. Similar to District Three, many areas of District Six feature facades of wealth: luxury apartment developments rise above SOMA’s converted warehouses, Mission Bay features a state-of-the-art research hospital and brand-new professional basketball arena, and South Beach condos look out upon stunning views of the Bay Bridge. Yet, District Six also covers the Tenderloin, Mid-Market, and Civic Center neighborhoods, communities that have historically offered refuge to San Francisco’s most vulnerable residents due to legally safeguarded short-term residential hotels and community organizations and shelters offering services to the unhoused. 42% of the population is also foreign-born, in line with District Three.
Beyond representing San Francisco’s lowest income communities, these Districts also feature the lowest proportion of ADU permits from the sample frame. Property owners filed for only eight ADU permits within District Three, one of which an owner cancelled and another which was withdrawn. Thus, only six active ADU applications currently exist in the District (within the sample frame). Moreover, none of these applications have resulted in new housing units, affordable or not: construction has not been completed on any of the projects. In regards to District Six, even less permit applications have been filed. Four are currently active, two of which have received their Certificate of Final Completion (CFC) from the DBI, meaning contractors have completed construction. Thus, out of the sample frame, only two new potentially affordable units of housing—in the form of ADUs—have been added to San Francisco’s lowest income neighborhoods since 2016.
This simple side-by-side comparison of each Supervisor Districts’ permit data against their income and poverty characteristics substantiates the hypothesis of urban planning researchers and housing activists: ADUs fail to provide the miracle affordability solution promulgated by state and local legislators. Moreover, in terms of spatial equity and accessibility, proposed ADUs fail to target the communities that need access to affordable housing options most. Even if property owners set ADU rental rates at much lower, more affordable price ranges (which has not yet proven to be true), they would not exist as a significant choice for lower-income populations. This spatial analysis reveals that unless San Francisco, and the state of California more broadly, expects its lowest income residents—those with the least access to resources and highest reliance on their localized social networks—to uproot their lives and move to new communities to access the choice of ADUs, the promise of accessory dwelling units is a false one.
*Lauren Ashley Week is a Junior Editor with MJEAL. She grew up in the San Francisco Bay Area, and studied Legal Studies and Political Economy at the University of California, Berkeley prior to pursuing her Juris Doctor and Master of Urban and Regional Planning at the University of Michigan. She can be reached at firstname.lastname@example.org.
 Jonathan Woetzel et al., A Tool Kit to Close California’s Housing Gap: 3.5 Million Homes by 2025, McKinsey Global Institute (2016).
 See Gavin Newsom, The California Dream Starts at Home, Medium.com (Oct. 21, 2017), https://medium.com/@GavinNewsom/the-california-dream-starts-at-home-9dbb38c51cae; see also Matt Levin, Newsom Wanted to Go Bold on Housing. Have He and Lawmakers Delivered So Far?, Cal Matters (Sept. 20, 2019), https://calmatters.org/housing/2019/09/newsom-california-housing-done-not-done/.
 Levin, Newsom Wanted to Go Bold on Housing. Have He and Lawmakers Delivered So Far?
 David Garcia, 2019 California Housing Legislation Round Up, Terner Center for Housing Innovation, University of California, Berkeley(Oct. 14, 2019).
 See A.B. 68, 2019-20 Assemb. (Cal. 2019); S.B. 13, 2019-20 S. (Cal. 2019); A.B. 881, 2019-20 Assemb. (Cal. 2019); A.B. 670, 2019-20 Assemb. (Cal. 2019).
 Cal. Gov’t. Code § 65852.2(j)(1) (2020).
 Laura Calugar, Are ADUs the Answer to San Francisco’s Affordable Housing Crisis?, Multi-Housing News (Apr. 25, 2018), https://www.multihousingnews.com/post/are-adus-the-answer-to-san-franciscos-affordable-housing-crisis/.
 Cal. Dep’t. of Hous. and Cmty. Dev., Accessory Dwelling Unit Handbook, 3-4 (Dec. 2020).
 See Calugar, Are ADUs the Answer to San Francisco’s Affordable Housing Crisis?.
 David Garcia, ADU Update: Early Lessons and Impacts of California’s State and Local Policy Changes, Terner Center for Housing Innovation, University of California, Berkeley, 3 (Dec. 2019).
 Id. at 4.
 See Newsom, The California Dream Starts at Home; Woetzel et al., A Tool Kit to Close California’s Housing Gap; Cal. Dep’t. of Hous. and Cmty. Dev., Accessory Dwelling Unit Handbook.
 Garcia, ADU Update: Early Lessons and Impacts of California’s State and Local Policy Changes, 3.
 Id.; see Ordinance No. 162-16, San Francisco Board of Supervisors (Jul. 19, 2016).
 Ordinance No. 95-17 § 2(d), San Francisco Board of Supervisors (Apr. 17, 2017).
 See Ordinance No. 162-17, San Francisco Board of Supervisors (Jul. 11, 2017).
 London N. Breed, Executive Directive 18-01, Office of the Mayor of San Francisco (Aug. 30, 2018).
 Cal. Dep’t. of Hous. and Cmty. Dev., Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs), CA.gov, accessed Jan. 25, 2021, https://www.hcd.ca.gov/policy-research/accessorydwellingunits.shtml#:~:text=dwellings%20planned%20occupancy.-,New!%20New%20ADU%20funding%20laws%20effective%20January%201%2C%202021,low%20to%20moderate%2Dincome%20households.
 Darrel Ramsey-Musolf, Accessory Dwelling Units as Low-Income Housing: California’s Faustian Bargain, 2 Urban Science 1, 2 (Jul. 16, 2018).
 Id. at 3.
 Id. at 1.
 See id. at 15-16.
 Jessica Zimmer, Accessory Dwelling Units being Steadily Built Throughout the City, The Potrero View (Sep. 2019), https://www.potreroview.net/accessory-dwelling-units-being-steadily-built-throughout-the-city/.
 Income and Poverty Characteristics: see San Francisco Planning, San Francisco Supervisor Districts Socio-Economic Profiles: American Community Survey 2012-2016 (2018); Permit Data: calculated by author.
 San Francisco Board of Supervisors, District 3, City and County of San Francisco, accessed Jan. 25, 2021, https://sfbos.org/supervisor-peskin.
 San Francisco Planning, San Francisco Supervisor Districts Socio-Economic Profiles: American Community Survey 2012-2016.
 San Francisco Board of Supervisors, District 6, City and County of San Francisco, accessed Jan. 25, 2021, https://sfbos.org/supervisor-haney-district-6; San Francisco Planning, San Francisco Supervisor Districts Socio-Economic Profiles: American Community Survey 2012-2016.
 San Francisco Planning, San Francisco Supervisor Districts Socio-Economic Profiles: American Community Survey 2012-2016.
 See Ramsey-Musolf, Accessory Dwelling Units as Low-Income Housing: California’s Faustian Bargain.
 See Kimberley Skobba & Edward G. Goetz, Mobility Decisions of Very Low-Income Households, 15 Cityscape 185 (2013).